Dangote Cement, based in Nigeria, is building a 1.5 million tons per annum integrated cement plant valued at USD 500 million in Mtwara, Tanzania.
The plant is expected to double the production capacity of cement in Tanzania and thereby reduce the cost of cement in Tanzania and the region.
Mtwara was selected as a new site due of Tanzania’s richness in limestone and gypsum deposits and the fact Tanzania attracts sound investment opportunities in the sector.
As stated by Aliko Dangote, Chairman of Dangote Group, “Our investment in this sector, which is outside the traditional mining sector, is to take advantage of the abundance of limestone in the country and work towards making Tanzania self-sufficient in cement production.”
Presently, Tanzania has an estimated production capacity of 3 million metric tonnes per annum against a demand of 2.2 million tonnes per annum.
The improving performance of the economy has fueled strong growth in cement demand and the prospects remain favourable, given the linear relationship between economic growth and cement consumption.
However the current differential between demand and production capacity, coupled with the high cost of energy and imported clinker, makes the average cost of cement per tonne in Tanzania between USD $90 and USD $105.
Similarly, a 50-kilogram bag of imported cement retails at USD 7.8 while locally produced brands sell at between USD 8 and USD 9.3.
“The plant, once it starts production, should help reduce the cost of cement in Tanzania and the region,” said Devakumar Edwin, Dangote Group’s Executive Director in charge of business development.
Dangote Cement produced around 10 million metric tons of cement in 2012 (with revenues of USD 1.8 billion), and is investing more than USD 2.5 billion to build more than 18 million tonnes of production and import capacity across thirteen African countries beyond Nigeria.